The base metals were mixed yesterday with zinc leading on the downside with a 1.4 percent drop to $2,204 – talk from LME Week Asia is generally not bullish and that seems to be weighing on sentiment, especially after the strong rebounds of late. Aluminium and lead were lower too, while nickel rebounded, tin was little changed, as was copper at $6,216.
Precious metals consolidated recent gyrations with platinum up 0.3 percent at $1,154 while there rest were little changed – a strong dollar ahead of the FOMC Meeting minutes was a headwind for the gold price that closed at $1,209.80.
This morning the base metals are up by an average of 0.5 percent with lead up 1.2 percent to $1,958, tin is off 0.5 percent at $15,915, while the rest are up between 0.4 and 0.7 percent with copper up 0.4 percent at $6,244. Volume is slightly higher with 3,720 lots traded. The FOMC Meeting minutes all but ruled out a June interest rate increase and that seems to have provided support, even though Chinese manufacturing PMI remains weak.
Silver is leading a rebound in the precious metals with prices up 0.8 percent at $17.22, the gold and platinum prices are up 0.3 percent at $1,212.20 and $1,156.90, respectively and palladium is off slightly at $773.30.
In Shanghai, the July base metals contracts are mixed with nickel down 1.7 percent and zinc off 0.2 percent, while the rest are up with tin leading the way with a 3.1 percent rise, while the rest are up between 0.2 and 0.5 percent with copper up 0.2 percent at Rmb 45,060.
Spot copper in Changjiang is also up 0.2 percent at Rmb 45,200-45,300, the backwardation with the spread is at an equivalent of $38 and the LME/Shanghai copper arb ratio is at 1 to 7.20.
Equities – the Euro Stoxx 50 is up 0.4 percent, the Dow was off slightly from record high levels and this morning Asia is mixed with China’s CSI 300 up 1.3 percent as poor flash manufacturing PMI continues to fuel expectations for more stimulus. The Nikkei is little changed, the Hang Seng is off 0.2 percent and the Kospi is off 0.8 percent.
Currencies – the rebound in the dollar index of late seems to have halted with the index last at 95.42, the euro is weaker at 1.1119, sterling is consolidating at 1.5544, as are the aussie at 0.7902, the rouble at 49.84 and the yuan at 6.2035, while the yen is weaker at 121.07.
The economic agenda is busy with a barrage of PMI data out, other data includes EU current account, UK retail sales, CBI industrial order expectations, US initial jobless claims, EU consumer confidence, existing home sales, Philly Fed manufacturing index, leading indicators and natural gas storage. In addition, ECB President Mario Draghi and FOMC member Stanley Fischer are speaking – see table below for more details.
The corrections in the base metals seem to have halted, at least for now, with prices rebounding today after running into scale down buying yesterday. The recent pullbacks have seen prices retrace an average of 52 percent of the recent gains with aluminium giving back 85 percent of its gains and copper and tin giving back around 25 percent. We now wait to see how much damage has been done to sentiment – it may be that after these significant pullbacks we are just seeing some short-covering/profit-taking, if underlying sentiment is still bullish then we would expect buyers to be prepared to chase prices higher again now.
The pullback in the precious metals ran into dip buying yesterday, palladium is still looking weak, while the others are now consolidating having formed dojis yesterday on the charts, which is a sign of indecision. The direction of the dollar is likely to set the direction for the gold price, although any negative developments over Greece could lend support.
| Overnight Performance | ||||
| BST | 06:26 | +/- | +/- % | Lots |
| Cu | 6244 | 27.5 | 0.4% | 1288 |
| Al | 1792 | 10.5 | 0.6% | 533 |
| Ni | 13150 | 70 | 0.5% | 831 |
| Zn | 2219 | 15 | 0.7% | 758 |
| Pb | 1958 | 23 | 1.2% | 305 |
| Sn | 15915 | -80 | -0.5% | 5 |
| Steel | 395 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | 0.5% | 3,720 | ||
| Gold | 1212.2 | 2.4 | 0.2% | |
| Silver | 17.22 | 0.13 | 0.8% | |
| Platinum | 1156.9 | 2.9 | 0.3% | |
| Palladium | 773.3 | -0.7 | -0.1% | |
| Average PM | 0.3% | |||
| SHFE Prices 06:38 BST | Change | % Change | |
| Cu | 45060 | 110 | 0.2% |
| AL | 13260 | 65 | 0.5% |
| Zn | 16640 | -30 | -0.2% |
| Pb | 13255 | 30 | 0.2% |
| Ni | 101800 | -1770 | -1.7% |
| Sn | 119460 | 3620 | 3.1% |
| Average change (base metals) | 0.4% | ||
| Rebar | 2178 | -22 | -1.0% |
| Au | 242.55 | -0.95 | -0.4% |
| Ag | 3667 | 43 | 1.2% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 2:35am | Japan | Flash Manufacturing PMI | 50.90 | 50.30 | 49.90 |
| 2:45am | China | HSBC Flash Manufacturing PMI | 49.10 | 49.40 | 48.90 |
| 5:30am | Japan | All Industries Activity m/m | -1.3% | -0.40% | 0.20% |
| 8:00am | France | French Flash Manufacturing PMI | 48.6 | 48 | |
| 8:00am | France | French Flash Services PMI | 52 | 51.4 | |
| 8:30am | Germany | German Flash Manufacturing PMI | 51.9 | 52.1 | |
| 8:30am | Germany | German Flash Services PMI | 53.9 | 54 | |
| 9:00am | EU | Flash Manufacturing PMI | 51.8 | 52 | |
| 9:00am | EU | Flash Services PMI | 53.90 | 54.10 | |
| 9:00am | EU | Current Account | 26.1B | 26.4B | |
| 9:30am | UK | Retail Sales m/m | 0.4% | -0.5% | |
| 11:00am | UK | CBI Industrial Order Expectations | 3.0 | 1.0 | |
| 12:30pm | EU | ECB Monetary Policy Meeting Accounts | |||
| 1:30pm | US | Unemployment Claims | 271K | 264K | |
| 2:45pm | US | Flash Manufacturing PMI | 54.6 | 54.1 | |
| 3:00pm | EU | Consumer Confidence | -5 | -5 | |
| 3:00pm | US | Existing Home Sales | 5.23M | 5.19M | |
| 3:00pm | US | Philly Fed Manufacturing Index | 8.1 | 7.5 | |
| 3:00pm | US | CB Leading Index m/m | 0.3% | 0.2% | |
| 3:30pm | US | Natural Gas Storage | 100B | 111B | |
| 6:30pm | EU | ECB President Draghi Speaks | |||
| 6:30pm | US | FOMC Member Fischer Speaks | |||
The post Gold price consolidates after recent pullback, all eyes on the dollar appeared first on The Bullion Desk.
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